As technology advances at a rapid pace, it’s time the insurance and reinsurance industry focused on utilising tech to create a more efficient risk transfer process, according to Hamilton Insurance Group’s Chief Executive Officer, (CEO) Brian Duperreault.
During a presentation at the Marsh & McLennan Young Professionals’ Global Forum 2015, Duperreault discussed the potential of a more efficient, cheaper global insurance and reinsurance industry, with the use of technology at its forefront.
“You have to know how to harness the off-the-charts amounts of data at our disposal, distil knowledge down to critical insight and look at that insight with fresh eyes. I believe we can do that with insurance. Select, analyse and price faster and more efficiently – the equivalent of risk in 140 characters,” said Duperreault.
New, alternative, often more cost-efficient sources of capital and business models continue to present themselves to players in the international re/insurance industry. Combine this with advanced technology, that speeds up the process of payment, claims, distribution and so on, and it’s easy to see a re/insurance industry that transfers risk in a much more efficient way than today.
“Don’t get me wrong, I’m not saying our industry hasn’t made any advances in the last few decades, it has. But there are aspects of how we do business that just don’t make sense in today’s world,” notes Duperreault.
One of the aspects he draws on that needs drastic change, and this is just a fraction of the possible changes technology can achieve, is with the distribution of products.
Duperreault explains that “35% – 40% of each premium dollar disappears into the cost of bringing our products to market and far too much of that is distribution expense. We can be using technology to make risk transfer a much more efficient process.”
That, it seems is an unnecessarily high percentage of profit being wasted from company balance sheets, and one that can be reduced over time with the implementation of comprehensive, efficient technological advances.
The millennial generation is what Duperreault refers to as ‘digital natives,’ born into a world were technology was really starting to gather pace and the majority of which are incredibly tech, and digitally savvy.
According to the CEO roughly half of U.S.-based insurance professionals are above the age of 45, and research suggests that by the year 2020 there will be a staggering 400,000 vacant positions in the insurance industry.
A predicted gap in the sector that would benefit from the employment of skilled, demanding and innovative talent, qualities the millennial age have in abundance, says Duperreault.
The millennial generation is the future of the re/insurance industry and the future of technology, and as the two combine and evolve to create new, technologically advanced solutions, it will likely dramatically change the way the re/insurance sector does business.
And this isn’t a bad thing, but it’s also something that isn’t going to happen overnight and will take a concerted effort of existing and upcoming industry experts and talent. Including the support and efforts of technology firms, insurers, reinsurers, governments and the wider risk transfer world.
“I believe we are at one of those rare inflection points where collectively we have an opportunity to shift the paradigm,” said Duperreault.
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